Texas potato chips individually bagged and medicine individually packaged possibly exempt.

Bags of potato chips with multiple servings are exempt. Generally, single serving bags of potato chips are also exempt. However, single serving bags of potato chips are taxable when sold in a store or gas station if an eating area is provided. Individual bags of potato chips are exempt at a grocery store if purchased at the main checkout line, even if the store has a deli with an eating area. The same bag of potato chips would be taxable if bought at the deli in the grocery store. Over-the-counter medicines like Tylenol sold in individual packages are exempt. (Letter, Texas Comptroller of Public Accounts, No. 20020602L, June 20, 2002)

Posted on December 15, 2002